Pallas Capital has provided a £3 million residential development loan for the construction of 10 homes in Roch, Pembrokeshire, as part of a build-to-sell housing scheme.
The 20-month facility is structured at 65% loan-to-gross-development-value and will fund the first phase of the project. The developer is an established local operator with previous experience in the region.
Complex site challenges
The transaction required detailed legal work due to complications including a complex title structure and unregistered land. These factors typically present obstacles when developers seek funding through conventional lending channels.
Senior originator Mark Witherington and underwriter Jamie Peacham handled the transaction for Pallas Capital, following an introduction from broker Laurie Baugh at Approved Finance.
Peacham said the deal required significant input from legal partners and a commercial approach to complete. He added that the lender was pleased to work with partners familiar with the local market.
Regional lending activity
The transaction adds to Pallas Capital’s activity in regional residential development, extending Witherington’s portfolio across the Midlands and Warwickshire into Wales. The deal comes at a time when affordability pressures continue to affect the UK housing market.
Pallas Capital has indicated it is in discussions with the developer regarding funding for subsequent phases of the scheme. This approach reflects a broader market trend where specialist lenders seek to establish ongoing relationships with developers rather than single-transaction arrangements.
The completion marks the start of construction on Phase 1a of the project, with the developer expected to deliver the 10 residential units over the loan term. The move comes as housing stock remains constrained across the UK, particularly in regional markets.
